This Israeli MCN isn’t just surviving, it’s thriving

While many Western MCNs lose steam, Yoola CEO Eyal Baumel is seeing huge YouTube returns by shying away from big-name creators--and the US market.

When Disney’s Maker Studios parted ways with 80 employees and 1,000 creators earlier this year, the move signaled another major blow to the vitality of multichannel networks (MCNs). In the three years since Disney shelled out US$500 million to buy Maker, the market potential for indie YouTube stars—and digital distribution modes—have drastically changed, thanks in part to market saturation and revenue-sharing discrepancies. But Israel-based Yoola is among a segment of MCNs that isn’t just weathering an evolving YouTube landscape—it’s capitalizing on it in a big way.

Yoola, which has more than 70,000 channels and works with 47,000-plus creators, garnered the third-most views of any network on YouTube last month, according to Social Blade. (It trailed behind Vevo and BroadbandTV.) The network includes channels like Like Nastya, which follows a young Russian girl’s daily life and can rack up more than 40 million views from a video of her playing in her backyard. Yoola also has mymillionTV in its roster (two million subscribers and more than 2.2 billion channel views), which has videos of plain Easter eggs. One video that has 30 surprise eggs has more than 700 million views alone.

“Companies like Maker have smaller viewing numbers than us,” says Yoola CEO Eyal Baumel. “I know that the MCN business has a bad perception now, but for us the business is still strong and growing every month.”

The secret to Yoola’s success may be found in where it spends its money and time. The company doesn’t shell out big bucks on famous creators, and its focus is on global markets, rather than just the US. Kids content plays a big part, too.

“We are a very different business compared to the classic American MCN,” says Baumel. “For example, we are a profitable company, we never raised money, we are an individually owned and we did not join the game that others MCNs played–like paying creators money in advance or giving them 105% of their revenue.”

Baumel believes that a large part of the downfall of US-based MCNs has stemmed from paying big-name creators lots of money in order to meet high view counts.

Among Yoola’s creator pool, 300 are top performers with some having more than one million subscribers. “We obviously cannot work individually with thousands of creators, but we are picking the best ones that we believe have the potential to make it big and we work very much one-on-one with them.”

And some of these top 300 contributors get a mind-boggling number of views, even by YouTube standards. “For me it is astounding. I don’t have kids so I didn’t know it could get so successful,” says Baumel. “Then I go in and I see eggs or a two-year-old girl walking around and feeding the animals in the zoo and it gets 40 million views, and it’s really hard to believe.”

While Yoola works with all kinds of genres, kids fare holds an appeal because it has the highest CPM of any type of content. “Kids stuff is more evergreen. It’s not like a viral video that goes off and gets 50 million views and then disappears after a day,” says Baumel. “The revenues that this content generates are more consistent.”

For the thousands of other members in its network, Yoola offers access to SEO optimization, analytics, a recommendation engine and more. These members are also from all over the world and speak many different languages, which gives Yoola another advantage over other MCNs that focus their energy on popular Western creators.

“These channels are popular in so many different countries. It’s unbelievable,” says Baumel. “Some of the creators are Russian, some are American, and you see that the content is popular in hundreds of countries from Saudi Arabia, to the Ukraine, Brazil, Germany and the US. It really travels well.”

In fact, Baumel is focusing his energy on Asia and emerging markets. Part of this entails taking content Yoola has already made and translating it. The MCN works with a life hack channel called Slivki Show and has since taken the same content and recreated it in different languages, only to rack up more views than it did in English.

China is also a particular focus for Yoola, despite the country not having access to YouTube. Baumel actually sees more potential in the region than ever before.

“We now have people on the ground in Beijing and we have partnerships with the 10 major social and video networks in China,” he says. “We’re unlocking the biggest market in terms of viewership and population–some of the largest creators in the world. So we localize our content in China, we operate and manage content, we promote content and then we’ll monetize it.”